UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 FORM 10-KSB/A-1

          [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2004

        [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                         COMMISSION FILE NUMBER 0-31114

                                  INTRAC, INC.
                                  ------------
                 (Name of small business issuer in its charter)

                  Nevada                             88-04717589
     -------------------------------      ---------------------------------
     (State or other jurisdiction of      (IRS Employer Identification No.)
      Incorporation or organization)

              130 West 42nd Street, 12th Floor, New York, NY 10036
              ----------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (212) 554-4550
                           ---------------------------
                           (Issuer's telephone number)

Securities Registered under Section 12(b) of the Exchange Act:  None

Securities Registered under Section 12(g) of the Exchange Act:  Common Stock,
$.001 par value

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year:  $836,841.

The aggregate market value of voting and non-voting common equity held by
non-affiliates of the registrant as of March 24, 2005: Common Stock, $0.001 par
value: $51,293,553.

The number of shares of the registrant's common stock outstanding as of
March 24, 2005: 25,626,436 shares.

Transitional Small Business Disclosure Format (check one):  Yes [ ] No [X]


<PAGE>


     This Form 10-KSB/A-1 amends Items 1 and 6 of the Form 10-KSB filed by
Intrac, Inc. on March 30, 2005. Reference is made to the initial filing with
respect to the other items and the Exhibits to the Form 10-KSB. The information
herein should be read together with the initial filing, which is available for
review on the SEC's internet website at http://www.sec.gov.


                                      INDEX

                                                                        Page No.
                                                                        --------

Facing Page                                                                 1
Table of Contents                                                           2

PART I
Item 1.  Description of Business                                            3

PART II
Item 6.  Management's Discussion and Analysis or Plan of Operation         21


SIGNATURES                                                                 30


                                       2
<PAGE>


                                     PART I
                                     ------

ITEM 1.  DESCRIPTION OF BUSINESS

BACKGROUND

     Intrac, Inc. (the "Company," the "Registrant," "Intrac," "we," "us" or
"our") is a holding company operating since December 6, 2004 through Innovative
Drug Delivery Systems, Inc. ("IDDS"). From incorporation in the State of Nevada
on September 6, 2000 through late 2001, our plan was to manufacture, market and
enhance a mini-Accronmotrac Vision Trainer. After ceasing those operations, we
were inactive and sought to acquire a private company which desired to obtain
control of a "public reporting" company.

     Effective December 6, 2004, upon a reverse merger among IDDS, our
subsidiary formed for such purpose and us, IDDS became our wholly-owned
subsidiary. Immediately prior to the merger, IDDS had completed a private
placement of 6,028,916 shares of its common stock at $3.00 per share. Upon the
merger, each outstanding share of IDDS common stock was exchanged for 1.0184107
shares of our common stock, all outstanding warrants and options to purchase
IDDS common stock were exchanged for our options and warrants, with the exercise
prices and number of shares adjusted for the exchange ratio, and our outstanding
debentures were converted into common stock and we repurchased all of
outstanding preferred stock for $1.00. The former IDDS stockholders became
holders of approximately 95.5% of our shares outstanding after the merger. IDDS
executive officers and directors then also became our executive officers and
directors.

OVERVIEW

     We are a specialty pharmaceutical company that applies proprietary
technologies to develop new products and improved formulations of existing drugs
that target current unmet and underserved medical need primarily in the pain
management market. We develop simple and user-friendly products, including new
modes and routes of delivery for drugs optimized for relieving
moderate-to-severe pain. In doing so, we intend to offer novel proprietary
products that in some cases can be administered in a less invasive manner and
generally should offer either improved safety or efficacy, or both, when
compared to the currently available formulations on the market. In addition, the
product choices currently available for the treatment of moderate-to-severe pain
are limited in the doses that may be given due to side effects, including
cardiovascular depression, tolerance and addiction, respiratory depression,
constipation, sedation and general diminution of quality of life. Our product
candidates are focused, in part, on treating a variety of pain disorders ranging
from acute and episodic moderate-to-severe pain associated with breakthrough
cancer pain, post-operative pain, post-trauma pain, such as orthopedic injury
pain, procedural pain and burn pain. We believe that our products assuming
regulatory approvals, will offer the medical community and patients significant
benefit and alternatives to the prescription pain medications available to pain
sufferers today.

     IDDS has licensed the worldwide exclusive rights to develop and
commercialize proprietary formulations of Dyloject(TM) (diclofenac sodium
injectable), Rylomine(TM) (intranasal morphine), and PMI-100/150 (intranasal
ketamine). The existing formulations of these parent drugs, including oral
diclofenac, oral and injectable morphine, and injectable ketamine, are
well-known prescription medications with well-documented profiles of safety,
efficacy and cost-effectiveness.


     All three of the product candidates are in mid-to-late stage clinical
trials as shown below:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
PRODUCT CANDIDATE           INDICATION                                   DEVELOPMENT STAGE
------------------------------------------------------------------------------------------
<S>                         <C>        <C>                               <C>
Dyloject(TM)                U.S.       Post-operative pain               Phase II
(injectable diclofenac)     Europe     Post-operative pain,              Phase II/III
                                       anti-inflammatory
------------------------------------------------------------------------------------------
Rylomine(TM)                U.S.       Acute moderate-to-severe pain     Phase II
(intranasal morphine)       Europe     Acute moderate-to-severe pain,    Phase II
                                       breakthrough pain
------------------------------------------------------------------------------------------


                                       3
<PAGE>


------------------------------------------------------------------------------------------
PMI-150                     U.S.       Acute moderate-to-severe pain,    Phase II
(intranasal ketamine)                  breakthrough pain
                            Europe     Acute moderate-to-severe pain,    Phase II
                                       breakthrough pain
------------------------------------------------------------------------------------------
</TABLE>

     Fulfillment of both European and U.S. Food & Drug Administration's ("FDA")
regulatory requirements typically takes several years, depending upon the type,
complexity and novelty of the product candidate, and requires substantial
resources towards product filing and approval. IDDS has successfully completed
bioequivalency studies and has initiated the pivotal clinical program of
Dyloject(TM) for the European markets and if successful, expects to file a
marketing authorization application ("MAA"). In the U.S., IDDS expects to file
an End of Phase II package with the FDA for Dyloject(TM) and Rylomine(TM) in
2005. Lastly, we expect to complete the PMI-100/150 Phase II clinical trials in
the U.S. in 2005.

     Our plan of operations for the next 12 months involves conducting the
necessary research and development to advance of each of our three late stage
product candidates through the drug development cycle. The development program
is designed to support global product registration, although special emphasis is
placed upon U.S. and European filings for drug approval and product
registration. Over the coming year, development activity will focus on
generating the necessary non-clinical and clinical data, and documenting the
manufacturing requirements needed to support the submission package in request
of the FDA End-of-Phase II meeting. An End-of-Phase II meeting is required in
order to progress into Phase III trials and ultimately product registration. The
FDA typically schedules the End-of-Phase II meeting within six weeks of the
meeting request, if accepted. If not accepted, the FDA informs the corporation
of insufficiencies necessary to rectify in order to reschedule. The design,
timing and cost of the Phase III development program will be largely determined
by the clinical safety and efficacy data and feedback from the FDA at the
End-of-Phase II meeting.

     Our lead product candidate in Europe is Dyloject(TM) which is in late stage
clinical trials and our development activities will be focused primarily on
supporting MAA submission for approval to sell this product. Rylomine(TM) and
PMI-150 are in Phase II clinical trials. In July 2004, we initiated, a
randomized, double-blind, placebo- and comparator-controlled Phase II/III
pivotal clinical trail comparing the safety, efficacy and therapeutic
equivalency of Dyloject(TM) to Voltarol(R). Over the coming year, we will focus
on the completing the pivotal Phase II/III Dyloject(TM) trial and if the data is
positive, filing that submission to European regulatory agencies for review and
approval. This review and approval process typically takes 12-18 months to
several years for approval, rejection, or approval subject to completion of
additional requirements imposed on the company by the regulatory agency at the
time of review completion. If the pivotal clinical trial data is not positive,
the submission will not be filed this year and the timing, extent and cost of
further drug development will not be known until the clinical program is
reevaluated.

     In September 2004, France was appointed as the Rapporteur country that will
be responsible along with Germany for reviewing the Rylomine(TM) MAA filing. In
January 2005, we initiated, a randomized, double-blind, placebo- and
comparator-controlled Phase II clinical trail comparing the safety and efficacy
of Rylomine(TM) to IV morphine. Over the coming year, we will focus on the
completing this Phase II trial and other clinical studies in addition to seeking
scientific advice from the French regulatory agency. The results of the clinical
trials along with feedback from the French regulatory agency will determine the
timing, extent and cost of the Rylomine(TM) product filing.


     Through December 31, 2004, IDDS had invested approximately $39.2 million in
research and development activities. The proprietary technology used to develop
the product candidates is protected by over 81 patents filed and, or approved
both in the United States and worldwide. Since inception, IDDS has been awarded
approximately $6 million in competitive and peer-reviewed government funding,
including contracts from the U.S. Department of Defense and grants from the
National Institutes of Health/National Cancer Institute.




MARKET OPPORTUNITY

     Despite advances in medicine and the development of new drugs, pain relief
remains a critical area of unmet and underserved medical need. Increasingly,
patients, advocacy groups, and the media are highlighting the shortcomings of


                                       4
<PAGE>


pain management. The Joint Commission for the Accreditation of Healthcare
Organizations has recently introduced new standards for pain assessment and
control, but the methods to achieve these standards are still not optimal.
Commercially available oral pain medications provide a slow onset of pain
relief, generally taking 15-20 minutes and sometimes as long as 40 minutes.
Undertreatment or overtreatment often results from the difficulty in matching
the doses of currently available drugs to the patient's level of pain. Further,
these currently available drugs can be simply ineffective. Other shortcomings of
existing pain drugs include poor side effect profiles and the invasive,
resource-intensive nature of intravenous administration.

     We are developing differentiated pain control products that provide the
flexibility and versatility required to adequately address the limitations of
existing prescription pain pharmaceuticals. First, all three of our product
candidates appear to work faster than the oral formulations of the currently
available prescription pain products. These product formulations rapidly deliver
our drugs into the bloodstream following either IV or intranasal administration
and provide appreciable relief of moderate-to-severe pain within ten minutes
according to initial clinical results.

     Second, Rylomine(TM) and PMI-100/150 product candidates address patient and
provider preferences for self-medication and less invasive administration. Both
have IV-like pharmacokinetics without the invasive nature of IV administration
or the need for costly and cumbersome patient controlled analgesia devices.
These product candidates present a significant opportunity for drug therapy both
inside and potentially outside the hospital or provider setting. The economic
benefit is compelling as the nasal route of administration eliminates the need
for personnel and equipment necessary to establish an IV line. In addition, a
non-invasive route of delivery reduces the incidence of needle-stick injuries
and the potential for transmission of blood-born viruses. Finally, the ability
to self-regulate provides an important benefit of control to the patient and
avoids doses that are higher than necessary to achieve safe and effective
management of pain.

     Third, Dyloject(TM) and PMI-100/150 product candidates provide alternatives
to the use of opioids such as morphine for treating moderate-to-severe pain.
Opioid administration to trauma patients must be undertaken with great caution,
vigilance and repeated titration of very small doses due to their recognized
risks of lowering blood pressure and causing respiratory depression. PMI-100/150
has been used off-label to treat trauma pain, as it does not have the same
potentially lethal, dose-limiting side effects as an opioid. The typical
treatment of breakthrough pain requires a combination of various opioids. When
used in combination with opioids, ketamine has been reported to reduce the
dependence on opioids, thereby reducing the requirement for narcotics, and
enhancing the patient's overall quality of life.

     Dyloject(TM) has the potential to provide an attractive alternative to
opioids for the treatment of post-operative pain. Our most significant U.S.
competitor in the injectable nonsteroidal anti-inflammatory drugs ("NSAID")
category is ketorolac tromethamine. When first launched, this drug had
significant sales prior to FDA's imposing a black box warning limiting the
combined duration of IV plus oral use of Toradol(R) to five days because of the
risk of serious adverse events. Oral diclofenac can be used safely in excess of
five days and has a considerably superior safety profile. IDDS' Dyloject(TM)
product candidate would be the first injectable version of diclofenac to be
marketed in the U.S. Europe presents a meaningful opportunity for IDDS' product
as well since injectable Voltarol(R) (diclofenac sodium) has significant
drawbacks including the need to freshly prepare, buffer and dilute at the
pharmacy and infuse to the patient slowly over 30 minutes.

     Oral diclofenac is the leading prescribed product in the post-operative
pain category. Dyloject(TM) would provide the medical healthcare provider, for
the first time, an injectable version of this drug for use in the immediate
post-operative, in-hospital period. We anticipate the consistency of parent drug
and the drug's dosage and administration regimen will allow for easy transition
from injectable to oral diclofenac when post-operative patients are able to
resume oral intake, thereby lowering the barrier to entry and driving product
adoption.




PAIN INDICATIONS

     The following describes the five key pain indications targeted by IDDS.


                                       5
<PAGE>


-- BREAKTHROUGH CANCER PAIN


     The prevalence of cancer pain is growing due to the continuous aging of the
general population and further increases in cancer survival rates as a result of
new therapies and treatments. Cancer pain represents the sum of continuous or
baseline pain, for which round-the-clock regimens of long-acting analgesics are
generally recommended, plus intermittent or breakthrough pain, for which the
current standard of care is to administer as-needed, immediate-release oral
opiods (http://www.ncbi.nlm.nih.gov/books/bv.fcgi?rid=hstat6.chapter.18803).
Breakthrough cancer pain is characterized by episodes of acute, moderate-to-
severe pain that suddenly flare up and overcome a standing, by-the-clock pain
management regimen. (http://www.whocancerpain.wisc.edu/eng/17_4/Interview). This
type of pain is particularly difficult to treat due to its severity, rapid
onset, and the often unpredictable nature of its occurrence. On average,
patients suffering from breakthrough cancer pain experience one to five
breakthrough episodes per day. Based upon careful estimates of the prevalence of
cancer breakthrough pain conducted both within the US. and internationally
(http://www.whocancerpain.wisc.edu/eng/17_4/Research), we estimate that about
two-thirds of the approximately 785,000 patients in the U.S. suffering from
moderate-to-severe cancer pain require treatment for breakthrough pain. We
believe that, based upon the properties that our product candidates have
displayed in our clinical trials to date, one or more of our product candidates
might provide a faster-acting and more effective alternative treatment for
breakthrough cancer pain.


-- POST-OPERATIVE PAIN

     Post-operative pain is typically attributable to acute, moderate-to-severe
pain and is the direct result of a surgical procedure and the resulting
inflammation associated with the trauma of surgery. Each year in the U.S., 15
million surgeries are performed that require opioid therapy. Post-operative pain
following minor surgical procedures is usually treated with oral or parenteral
NSAIDs or a weak oral opioid. More invasive surgical procedures require
hospitalization for monitoring and management of post-operative pain.
Intravenous patient-controlled analgesia ("PCA") with opioids is the therapy of
choice for treating this latter patient population prior to discharge from the
hospital. PCA allows a patient to receive drugs on demand by using an infusion
pump that is programmed by the physician to intermittently administer a single
dose of a drug, typically morphine or a similar opioid, when the patient pushes
a button. The addition of parenteral or oral NSAIDs to this regimen is gaining
broader use as NSAIDs have been demonstrated to decrease the requirement for
opioids. We believe that one or more of our product candidates might be
effective for the management of pain following minor surgical procedures and
offer a readily acceptable alternative to IV PCA for the management of
moderate-to-severe pain and breakthrough pain following major surgical
procedures.

-- BREAKTHROUGH BACK PAIN

     Lower back pain is the most common medical complaint in developed
countries. Thus, the patient population is extremely large, and while a host of
physiotherapy, nerve block, and surgical approaches are available, analgesics
are the mainstay of most therapeutic treatment program. According to the
National Institutes of Health, Americans spend $50 million each year on lower
back pain (www.ninds.nih.gov/disorcers/backpain/detail_backpain), the most
common cause of job-related disability and a leading contributor to missed work.
The most severe episodes require the use of opioids. We believe that one or more
of our product candidates might effectively treat the subset of patients
suffering from breakthrough episodes of lower back pain whose cases are severe
enough to be activity-limiting.

-- ORTHOPEDIC INJURY

     Treatment of fractures can involve the realignment of bones, a procedure
referred to as reduction. Although fractures and dislocations are generally due
to minor injuries, the time leading up to and during reduction of a fracture or
the correction of a dislocation is often associated with acute,
moderate-to-severe pain. According to the National Center for Health Statistics'
Annual Health Survey published in 2001, there were approximately 15 million
emergency department visits due to fractures or dislocations in the U.S.
annually in from 1992-1999 (www.cdc.gov/nchs/data/series/sr_13/sr13_150.pdf). We
believe that emergency departments have an economic incentive to use any therapy
that can speed patient discharge from the hospital and avoid expenses associated
with administration of intravenous drugs. We also believe that one or more of
our product candidates might satisfy the underserved medical need for agents


                                       6
<PAGE>


that are fast-acting, safe, and easily titrated to treat moderate-to-severe pain
associated with orthopedic injury in the emergency department setting.

-- BURN PAIN

     According to the American Burn Association, there are over one million burn
injuries each year in the U.S. of which 700,000 present to emergency rooms and
45,000 require hospitalization
(www.ameriburn.org/pub/BurnIncidenceFactSheet.htm). Burn pain in the latter
group is typically immediate and of moderate-to-severe intensity as a result of
injuries sustained after thermal, chemical or electrical trauma to skin and
deeper tissue, as well as the removal or reapplication of dressings applied to
the initial burn. Burn pain is often more challenging to control than
post-operative pain and is currently treated with potent intravenous opioids,
oral opioids, and other oral analgesics. Pain associated with burn trauma
continues to impair the lives of burn victims long after the initial injury and
hospitalization. The published research on pain in this population is much less
extensive than for post-operative or cancer pain, and we believe the burn pain
patient population to be largely underserved. We believe that one or more of our
product candidates might be effective for the management of pain following
in-patient burn treatments, as well as for treating various forms of procedural
pain, including wound care treatments and dressing reapplications.

STRATEGY

     Our goal is to become a successful specialty pharmaceutical company by
focusing our efforts on developing new prescription pain medications that are
simple, user friendly and cost-effective for the potential future treatment of
patients with underserved pain management needs. Key elements of this
commercialization strategy are:

     o    FOCUS ON UNMET AND UNDERSERVED MEDICAL NEEDS IN THE PRESCRIPTION PAIN
          MEDICATION MARKET. Despite advances in medicine and the development of
          new drugs, pain relief remains a critical area of unmet and
          underserved medical need. Increasingly, patients, advocacy groups, and
          the media are highlighting the shortcomings of pain management. We
          will continue to focus on developing and commercializing
          differentiated pain control products that provide the flexibility and
          versatility required to adequately address the limitations of existing
          prescription pain drugs.

     o    EFFICIENTLY SELECT PRODUCT CANDIDATES TO MINIMIZE RISK AND MAXIMIZE
          OPPORTUNITY. We will continue to use in-house experience and
          capabilities in product development, business development and
          portfolio management to build and maintain an attractive product
          portfolio and candidate pipeline.

     o    DEVELOP NEW PRODUCTS WITH REDUCED CLINICAL AND REGULATORY RISK.
          Following the specialty pharmaceutical business model, we will seek to
          develop branded pharmaceuticals with novel formulations, routes of
          administration, methods and modes of delivery and new indications from
          existing approved drugs with established safety profiles.


     o    RETAIN SALES AND MARKETING RIGHTS TO PRODUCT CANDIDATES THROUGH LATE
          STAGE DEVELOPMENT. We currently retain U.S. and worldwide marketing
          and distribution rights for our products. We may retain marketing
          rights for narrow distribution channels in the U.S. and license out
          broader distribution channels and non U.S. rights.


PRODUCTS

     We are developing differentiated pain control products that provide the
flexibility and versatility required to adequately address the limitations of
existing prescription pain pharmaceuticals. The current pipeline includes three
lead product candidates, each of which is protected by different intellectual
property and is based on different technology. We selected these product
candidates based on our belief that each offered significantly lower clinical,
regulatory, and commercial risk profiles as compared to new chemical entities.


                                       7
<PAGE>


DYLOJECT(TM) (DICLOFENAC SODIUM INJECTABLE)

     Background. After operations or trauma, injured tissue becomes inflamed.
This inflammation is painful. Common drugs that reduce inflammation fall into
two broad classes. First, are the steroids (short for corticosteroids, such as
cortisone). These are potent anti-inflammatory drugs but their use even for
short intervals carries substantial risks such as weakening of the bones or a
tendency towards infections. Thus, corticosteroids are not routinely used after
operations. The second class comprises nonsterodial anti-inflammatory drugs
(NSAIDs), that include prescription drugs for the treatment of
moderate-to-severe pain, as well as the more common and numerous
over-the-counter prescription drugs for the treatment of mild-to-moderate pain,
such as aspirin. NSAIDs are widely used for all types of pain, but relatively
few can treat the moderate-to-severe pain typically experienced following
operations. NSAIDs reduce pain and inflammation through several mechanisms,
principal among which is their ability to interfere with the enzyme class known
as cyclooxygenases. This enzyme acts upon certain fatty acids made by the body
to generate pain-mediating substances known as prostaglandins. Inhibition of the
cyclooxygenases by NSAIDS reduces prostaglandin levels decreasing inflammation
and thus reducing the pain associated with the inflammatory response. Diclofenac
is a prescription NSAID that is widely prescribed to treat post-operative pain
due to its combination of effectiveness and tolerability.

     Currently available formulations of the popular drug diclofenac are poorly
soluble in water. We have successfully improved the solubility of diclofenac by
the addition of a doughnut-shaped molecule that has the technical name
hydroxypropyl-beta-cyclodextrin (HPaCD). Diclofenac and HPaCD can be formulated
to easily dissolve in water. This resultant product is more amenable for
injection into a muscle or a vein, where the solubilized material is able to
directly enter the bloodstream. HPaCD is one example of a broader family of
ring-shaped sugar molecules called cyclodextrins. Cyclodextrins have been used
to improve the solubility of many hard-to-dissolve drugs. There are many types
of cyclodextrins and most are toxic. Only modified cyclodextrins such as HPaCD
are regarded as safe for injection. Our HPaCD is used in higher concentrations
in the FDA-approved injectable antifungal drug, Sporanox(R) (itraconazole).

     NSAIDs offer several advantages over opioids for the management of
post-operative pain. NSAIDs have limited effects on the central nervous system,
do not depress respiration, and are non-sedating. This latter attribute is of
special importance in short-stay or ambulatory surgery since NSAIDs can provide
analgesia without delaying patient discharge from the hospital or outpatient
setting. In addition, NSAIDs are also useful in patients who for any reason are
unable to take opioids. About a decade ago it became clear that there are at
least two forms of the enzyme cyclo-oxygenase (abbreviated "COX"). COX-1 plays a
role in protecting the stomach from forming ulcers, and also for allowing blood
to clot in the first minute after a cut or incision. COX-2 becomes active after
inflammation or trauma, and also is important for normal kidney function. The
recognition that COX-1 and COX-2 serve different functions led to the
development and wide use of drugs that selectively inhibited COX-2 and not
COX-1, based upon the potential for such drugs to reduce pain and inflammation
with fewer stomach ulcers, and less effect upon blood clotting, than the
nonselective NSAIDs. However, in the past several years it has also become clear
that some COX-2 inhibitors (also called "coxibs") interfere with the health of
blood vessels in the heart and those going to the brain, and increase the risk
of heart attack or stroke. The expanding concerns about heart attacks and
strokes associated with long-term use of COX-2 inhibitors and, most recently,
naproxen do not necessarily apply to the short-term, perioperative
administration of these compounds for acute pain. Clinical trials to date have
not demonstrated increased cardiovascular and cerebrovascular risk associated
with the short-term use of COX-2 inhibitors and naproxen to treat acute
postsurgical pain. On the other hand, clinician's global concerns including
fears of litigation associated with any medical complications after prescribing
oral or injectable COX-2 inhibitors may reduce the current and projected market
share of COX-2 inhibitors for the treatment of acute pain. Diclofenac is not
considered to be a selective COX-2 inhibitor because it inhibits COX-1 and COX-2
alike.

     There still exists an underserved medical need for a safe and effective
injectable NSAID in the hospital setting. For example, ketorolac tromethamine is
an injectable NSAID that had significant sales prior to FDA's imposing a black
box warning limiting the combined duration of IV plus oral use to five days
because of the risk of serious adverse events. Oral diclofenac can be used
safely in excess of five days and has a safety profile, considered superior to
oral ketorolac. Diclofenac is currently approved for use in the U.S. in a
variety of oral formulations as well as a topical and ophthalmic formulation. An
injectable formulation of diclofenac is commercially available in Europe, but
has significant drawbacks, including the need to buffer and dilute it at the
pharmacy and a lengthy infusion period (over thirty minutes). The development of
injectable formulations of diclofenac has been limited by the drug's poor


                                       8
<PAGE>


solubility. We believe that the proprietary formulation of injectable diclofenac
that we are developing has the potential to overcome these issues and to provide
an effective and safe treatment of moderate-to-severe acute pain.

     Clinical Results. Dyloject(TM) is in development in the U.S. for the
treatment of post-operative pain and in Europe for the treatment of acute forms
of pain, including renal colic, exacerbations of osteo- and rheumatoid
arthritis, acute back pain, acute gout, acute trauma, pain associated with
fractures in addition to post-operative pain.

     Initial studies of Dyloject(TM), when administered by intravenous or
intramuscular injection, have demonstrated its safety along with a safe rapid
onset of action. Dyloject(TM) has also demonstrated bioequivalence to
Voltarol(R). Published results from a phase II 269-patient randomized,
placebo-controlled, double-blind clinical trial demonstrated that Dyloject(TM)
provides a rapid drop in post-operative pain intensity. At all dosage levels
tested, Dyloject(TM) provided statistically significant post-operative pain
relief through 6 hours (p <0.05) and was safe and well-tolerated by patients.
The results of this clinical study were published in 2000 in the European
Journal of Clinical Pharmacology.

     In October 2003, IDDS completed a randomized, four-way cross-over phase I
trial comparing the pharmacokinetics, bioequivalence and safety of Dyloject(TM)
to Voltarol(R). Dyloject(TM) was bioequivalent to Voltarol(R) regardless of
intravenous infusion time as defined and required by the Medicines and Health
Products Regulatory Agency ("MHRA").

     In March 2004, IDDS completed a randomized, four-way cross-over phase I
clinical study comparing the pharmacokinetic, bioequivalence and safety of
Dyloject(TM) to Voltarol(R) when administered intravenously and intramuscularly.
Dyloject(TM) was found to be bioequivalent to Voltarol(R) regardless of the
method of administration and was safe and well tolerated.


     In July 2004, IDDS initiated, a randomized, double-blind, placebo- and
comparator-controlled Phase II/III pivotal clinical trail comparing the safety,
efficacy and therapeutic equivalency of Dyloject(TM) to Voltarol(R).


RYLOMINE(TM) (INTRANASAL MORPHINE)

     Background. Rylomine(TM) is in development in the U.S. and Europe for the
treatment of acute moderate-to-severe pain and breakthrough pain. Breakthrough
pain is acute pain that overcomes or breaks through a patient's fixed,
by-the-clock doses of pain medicine. Morphine, the active pharmaceutical
ingredient in Rylomine(TM), is the analgesic standard to which all other opioids
are usually compared, and has potent effects upon the mu-opioid receptor that is
found in many nerve cells with pain pathways. When morphine binds to this
receptor, it interferes with the transmission of pain signals from nerve endings
and across nerve pathways to the spinal cord and brain. The power of morphine to
reduce the level of physical distress places it among the most important
naturally occurring compounds. Morphine is a strong analgesic used for the
relief of moderate-to-severe acute and chronic pain, pre-operative sedation, and
as a supplement to anesthesia. It is the drug of choice for treating
moderate-to-severe pain associated with, in part, surgical operations,
myocardial infarction and cancer.

     ChiSys(TM) Delivery Platform. We have a proprietary drug delivery
technology that allows us to deliver morphine and to achieve therapeutic blood
levels of the drug in a predictable fashion that was previously unattainable
when administered through the nasal route. The key to this technology is
ChiSys(TM), a naturally occurring carbohydrate polymer that, while
pharmaceutically inert by itself, enhances the absorption of compounds across
mucosal membranes such as those of the nasal cavity, and thereby provides the
potential to deliver drugs through such routes. This enhancement of drug
delivery is particularly important for compounds such as morphine that are
poorly absorbed across mucosal barriers, in particular, the nasal membrane. The
contribution of ChiSys(TM) to enhancing mucosal drug absorption is reported to
be due to several factors including its potent mucoadhesive property, which
prevents drug washout.

     Conventional oral formulations of morphine do not provide rapid relief of
pain in many patients. Aside from its slow and variable onset of action, oral
morphine demonstrates considerable patient-to-patient variability in absorption.
Clinicians therefore must rely on injection of morphine into a muscle or a vein
to assure rapid and effective pain relief. Administration of injectable morphine


                                       9
<PAGE>


requires professional assistance or hospitalization. Therefore, alternative
formulations of morphine that are easy to administer by a patient or caregiver,
and deliver rapid onset of action with clinically meaningful blood levels of
active drug would provide significant medical benefit. We believe that
Rylomine(TM) represents such an alternative nasal formulation that combines
patient convenience, ease of use, and cost-effectiveness with rapid onset of
pain relief and well-accepted potency equivalent to injectable delivery routes.

     Previous single- and multiple-dose Phase I clinical studies of Rylomine(TM)
have demonstrated similar pharmacokinetics to intravenous morphine. Rylomine(TM)
is rapidly absorbed to produce blood levels of morphine typically associated
with analgesic effectiveness. These data were presented at the 2002
International Association for the Study of Pain 10th. World Congress on Pain, in
San Diego, CA.

     In December 2002, IDDS completed a large randomized, placebo- and
comparator-controlled, double-blind, phase II trial evaluating the safety and
effectiveness of Rylomine(TM) in 225 patients suffering from moderate-to-severe
post-operative pain. Rylomine(TM) provided statistically superior pain relief as
compared to placebo (p <0.05) with appreciable pain relief occurring five to ten
minutes following nasal administration. Rylomine(TM) delivered a statistically
similar onset of action and total pain relief outcome as compared to intravenous
morphine infused over 10 minutes. Rylomine(TM) also demonstrated a lower side
effect profile and faster onset of action compared to oral morphine.

     In October 2004, following the decision of the European Agency for the
Evaluation of Medicinal Products ("EMEA") to grant "Part B status" for
Rylomine(TM), a pre-MAA submission meeting was held between the representatives
of the EMEA and IDDS. In recognition that Rylomine(TM) represents a significant
innovation and a potential benefit to the European Community, Part B status was
granted by the EMEA making the product eligible for review through the faster
Centralized Procedure.


     In January 2005, we initiated a randomized, double-blind, placebo-and
comparator-controlled Phase II clinical trial comparing the safety and efficacy
of Rylomine(TM) to IV morphine.


PMI-100/150 (INTRANASAL KETAMINE)

     Background. PMI-100/150, a proprietary nasal formulation of ketamine, is
currently under development by us for treatment of acute moderate-to-severe
pain, including breakthrough pain. Ketamine, a non-opiate, is an
N-methyl-D-aspartate ("NMDA"), receptor antagonist that has been in clinical use
for over 30 years as a general anesthetic. Since its approval by the FDA,
ketamine has been safely used as an anesthetic in tens of thousands of patients.
NMDA receptors are located in the central nervous system and play a role in the
perception of acute and chronic pain as well as in the development of analgesic
tolerance to opioids. Ketamine blocks NMDA receptors and therefore is a logical
drug candidate for use as an analgesic for syndromes associated with acute pain,
as well as breakthrough pain. Ketamine, at lower doses than that approved for
use as an anesthetic, has been reported in the medical literature to be an
effective analgesic in settings such as post-operatively, during medical
procedures, and for neuropathic pain.

     As reported in recent medical literature, the use of ketamine as an
analgesic, while not yet approved by the FDA, is gaining clinician acceptance as
a result of its effectiveness and minimal impact on cardiovascular and
respiratory functions. Since ketamine is not approved for use as an analgesic,
physicians have resorted to using the drug off-label. We believe that an
FDA-approved formulation of ketamine for the treatment of moderate-to-severe
pain will provide physicians with an accepted and regulated alternative to
off-label use. In addition, in 1998, ketamine was scheduled by the DEA as a
Schedule III controlled substance. We believe this will only improve the
prospects of its intended use of ketamine, as the scheduling of ketamine by the
DEA provides additional protection with respect to controlling distribution,
prescribing patterns, and disposal, thereby reducing the potential for misuse.

     Clinical Results. PMI-100/150 is in development in the U.S. and Europe for
the treatment of acute moderate-to-severe pain and breakthrough pain. We believe
that PMI-100/150 is optimized for use as a pain medication and potentially
offers a safe, non-opioid alternative for the treatment of moderate-to-severe
pain.


                                       10
<PAGE>


     Previous randomized, double-blinded, placebo-controlled phase II clinical
studies have demonstrated statistically significant (p<0.05) relief of
moderate-to-severe post-operative and breakthrough pain. PMI-100/150 was
fast-acting, with statistically significant (p<0.05) pain relief occurring as
early as 4 minutes post administration of PMI-100/150. PMI-100/150 also appeared
to be safe and well-tolerated by patients. These results were presented at the
American Society for Clinical Pharmacology and Therapeutics in Atlanta, Georgia
in April 2002 and the American Society of Clinical Oncology in Orlando, Florida
in May 2002.

     In May 2003, following the presentation of clinical data at the plenary
session of the Advanced Technology Application for Combat Casualty Care
conference in Orlando, Florida, the U.S. Department of Defense awarded an
approximately $4.3 million funding extension to IDDS to aid in the development
of PMI-100/150. This award is based on the need of the military for a
fast-acting, non-invasive, and non-sedating alternative to the intravenous and
oral medications commonly used for treatment of combat-related injuries, such as
burns, bullet wounds and blunt trauma.

     In June 2004, IDDS had an End-of-Phase II meeting with representatives of
the FDA. The purpose of the meeting was to review the intended clinical use and
the proposed product development plan for PMI-100/150. The FDA provided guidance
and defined the requirements for NDA submission.

COMPETITIVE GRANTS

     IDDS has received the following grants that provide both financial and
development support for several of its clinical programs.

-- U.S. DEPARTMENT OF DEFENSE

     The U.S. Department of Defense has awarded IDDS a total of approximately
$5.5 million in contracts and grants to develop PMI-100/150 for the treatment of
acute moderate-to-severe pain in military personnel and for mass casualty
management. These contracts reimburse IDDS for expenses associated with some
aspects of the non-clinical, clinical, and manufacturing sub-projects required
to support a NDA submission.

STRATEGIC AGREEMENTS

-- SHIMODA AGREEMENT

     In December 2001, IDDS entered into a license agreement with Shimoda
Biotech, Ltd. and its wholly-owned subsidiaries, Farmarc N.A.N.V. (Netherlands
Antilles) and Farmarc Netherlands B.V. under which IDDS received certain
worldwide, exclusive rights to develop and commercialize products related to a
proprietary formulation of the injectable delivery of diclofenac. Shimoda
Biotech, Ltd. and Farmarc's rights to the formulation were originally licensed
from Janssen Pharmaceutica Products, L.P. Under the terms of this agreement,
IDDS agreed to use commercially reasonable efforts to bring to market products
that use the technology it licensed from Farmarc and Shimoda, continue active
marketing efforts for those products, and comply with the commercialization
timelines imposed on Shimoda by IDDS that licensed some of this technology to
Shimoda. IDDS is currently in compliance with the agreement and has positive
relations with its license partners. Shimoda agreed that it will not grant to
any third party any right or license under any of Shimoda's intellectual
property rights involving the use of any cyclodextrin product related to pain
management, anesthesia or sedation without first offering IDDS the right on the
same terms and conditions. Under the license agreement with Shimoda Biotech
(Proprietary) Ltd., we are also obligated to pay an aggregate of $6.0 million
upon the occurrence of specified developmental milestones, which include the
filing of an NDA with the FDA for Dyloject(TM), the approval of an NDA by the
FDA and the first commercial sale of a licensed product and pay a royalty based
upon our and our sublicensees' sales of products. As of December 31, 2004, we
had paid Shimoda in aggregate $1.7 million in cash since the inception of this
agreement. Under this agreement, the timing of the remaining milestones is
dependent upon factors that are beyond our control, including our ability to
recruit patients, the outcome of future clinical trials and any requirements
imposed on our clinical trials by the FDA. If the FDA imposes more stringent
requirements on our clinical trials, the length and number of such trials may be
increased resulting in additional research and development expenses. IDDS is


                                       11
<PAGE>


obligated to pay Shimoda and Farmarc, on a country-by-country basis, a royalty
on the sales, net of various customary cash discounts, attributable to these
products.


-- AGREEMENTS


     In August 2000, IDDS entered into a license agreement, which was amended in
October 2001 and October 2003, with West Pharmaceutical under which IDDS had a
worldwide, exclusive right to develop and commercialize intranasal morphine
under patents held by West Pharmaceutical for the transmucosal delivery of
morphine to humans and animals for the treatment of pain. The licensed patent
portfolio from West Pharmaceuticals provides U.S. protection until 2014 and
worldwide protection through 2016. The term of the license remains in effect
until the last to expire of the Licensed Patents. We believe that IDDS' recently
filed patent applications, if approved, will significantly expand the life of
these patents. In the future, we may be required to pay West Pharmaceutical an
aggregate of $5.0 million for research and development milestones if certain
defined events occur, which include the first filing of a marketing
authorization application with a regulatory agency, first approval of a
marketing authorization application and the first commercial sale of a licensed
product. As of December 31, 2004, we had paid West in aggregate $5.6 million in
cash since the inception of this agreement. The timing of the remaining
milestones is dependent upon factors that are beyond our control, including our
ability to recruit patients, the outcome of future clinical trials and any
requirements imposed on our clinical trials by regulatory agencies. If
regulatory agencies impose more stringent requirements on our clinical trials,
the length and number of such trials may be increased resulting in additional
research and development expenses. IDDS is obligated to pay West Pharmaceutical
a royalty on the sales, net of various customary cash discounts, attributable to
intranasal morphine.

     In February 2005, West Pharmaceutical sold a substantial majority interest
in its drug delivery business to Archimedes Pharma Limited ("Archimedes"), a new
company formed by Warburg Pincus Private Equity VIII and Warburg Pincus
International Partners. As part of the sale, West Pharmaceutical assigned the
IDDS License Agreement and related agreements to Archimedes, and Archimedes
assumed all of West Pharmaceutical's obligations thereunder.

-- KETAMINE LICENSE

     IDDS assumed a license agreement with Dr. Stuart Weg upon the closing of
its merger with Pain Management, Inc., another specialty pharmaceutical company,
in September 2000. The license grants IDDS the exclusive, worldwide rights for
the intellectual property surrounding intranasal ketamine. Under the license
agreement with Dr. Weg, we are obligated to make aggregate milestone payments of
approximately $1.6 million to Dr. Weg, Herbert Brotspies and Calgar &
Associates. As of December 31, 2004, we had paid Dr. Weg, Herbert Brotspies and
Calgar & Associates an aggregate of $950,000 in cash and issued 66,563 shares of
common stock in lieu of cash payments of $100,000, and we had accrued the final
$500,000 milestone payment, which may be paid in our stock. We are also
obligated to pay Dr. Weg, Dr. Brotspies, and Calgar & Associates a royalty on
the sales, net of various customary cash discounts, attributable to intranasal
ketamine.

SALES AND MARKETING

     Our commercialization efforts will focus on a dual-path marketing and
distribution strategy as a result of our areas of therapeutic focus. A narrow
channel of distribution will target hospitals, chronic care facilities,
palliative care providers, long-term care centers, pain specialists,
high-prescribing oncologists, oncology clinics, burn clinics, and customers such
as the U.S. Department of Defense. This focused approach allows for the creation
of a small internal sales and marketing organization. In addition to building
our own sales and marketing organization, we are also evaluating the utilization
of a broader channel of distribution such as large, established pharmaceutical
companies and contract sales organizations to assist in the broadest
commercialization of its product candidates. In order to cover all of the key
prescribing physicians at an adequate level of reach and frequency, we would
need to significantly expand our proposed sales force or partner with a company
with a substantial sales organization. Outside of the U.S. we intend to
sublicense distribution and marketing rights to one or more pharmaceutical
companies with established sales forces in the targeted territories.


                                       12
<PAGE>


COMPETITION

     Our success will depend, in part, upon our ability to achieve market share
at the expense of existing, established products and future products in the
relevant target markets. Existing and future products, therapies, technological
innovations, and delivery systems will compete directly with our products.
Competing products and technologies may provide greater therapeutic benefit for
a specific indication or may offer comparable performance at a lower cost.
Alternative technologies are being developed to improve the delivery of drugs
within the prescription pain management industry, several of which may be in the
clinical trials stage or are awaiting approval from the FDA.

     We compete with fully integrated pharmaceutical companies, smaller
companies that are collaborating with larger pharmaceutical companies, academic
institutions, government agencies, and other public and private research
institutions. Many companies, for example, currently sell either generic or
proprietary prescription pain formulations. Companies that currently sell both
generic and proprietary opioid formulations include among others Abbott
Laboratories, Alza Pharmaceuticals, AstraZeneca, Cephalon, Endo Pharmaceuticals,
Elkins-Sinn, Janssen Pharmaceutica, McNeil Consumer Healthcare, Purdue Pharma,
Roxane Laboratories and Watson Laboratories. Alternative technologies are being
developed to improve or replace the use of opioids for pain management, several
of which are in clinical trials or are awaiting approval from the FDA. These
alternatives include Elan's Prialt, Pfizer's Lyrica as well as combination
products from Endo Pharmaceuticals. In addition, companies pursuing different
but related fields represent substantial competition. Such competitors may also
have access to more resources, financial and otherwise, which may allow these
institutions to develop and market competing products more rapidly and more
effectively than we have. Many of these competitors, either alone or together,
with their collaborative partners, operate larger research and development
programs and have substantially greater financial resources than we do, as well
as significantly greater experience in developing drugs, undertaking preclinical
testing and human clinical trials, obtaining FDA and other regulatory approvals
of drugs, formulating and manufacturing drugs and launching, marketing and
selling drugs.

INTELLECTUAL PROPERTY

     Our goal is to obtain, maintain, and enforce patent protection for our
products, formulations, processes, methods, and other relevant proprietary
technologies, preserve our trade secrets, and operate without infringing on the
proprietary rights of other parties, both in the United States and in other
countries. Our policy has been to actively seek to obtain, where appropriate,
the broadest intellectual property protection possible for our product
candidates, proprietary information, and proprietary technology through a
combination of contractual arrangements and patents.


     IDDS currently has certain exclusive license rights under the eight US
patents listed below as well as similar rights to a number of related foreign
patents and patent applications filed under Patent Cooperation Treaties. The US
patents are:

<TABLE>
<CAPTION>
          Patent Numbers     Product Candidate       Issue Date
          --------------     -----------------       ----------
             <C>                 <C>               <C>
             5,989,582           Ketamine          Nov. 23, 1999
             6,248,789           Ketamine          June 19, 2001
             5,543,434           Ketamine          Aug. 6. 1996
             5,679,714           Ketamine          Oct. 21, 1997
             5,744,166           Morphine          Apr. 28, 1998
             5,629,011           Morphine          May 13, 1997
             5,554,388           Morphine          Sept. 10, 1996
             5,679,660           Diclofenac        Oct. 21, 1996
</TABLE>


     We also depend upon the skills, knowledge, and experience of our scientific
and technical personnel, as well as that of our advisors, consultants, and other
contractors, none of which is patentable. To help protect our proprietary
know-how which is not patentable, and for inventions for which patents may be
difficult to enforce, we will rely on trade secret protection and
confidentiality agreements to protect our interests. To this end, we require all
employees, consultants, advisors and other contractors to enter into
confidentiality agreements that prohibit the disclosure of confidential


                                       13
<PAGE>


information and, where applicable, require disclosure and assignment to us or
IDDS of the ideas, developments, discoveries and inventions important to its
business.

MANUFACTURING


     We do not own any manufacturing facilities. IDDS contracts with qualified
third parties who must comply with current good manufacturing practices and
procedures reviewed by the FDA for the manufacture of bulk active pharmaceutical
ingredients and finished product. IDDS has not entered into any commercial
manufacturing agreements to date. Historically, IDDS has worked with several
manufacturing vendors including and most recently DPT Lakewood, Inc. for the
clinical supply of Rylomine(TM) and PMI-100/150, and with Precision Pharma for
the clinical supply of Dyloject(TM). We were advised that the FDA has inspected
and approved both DPT Lakewood, Inc. and Precision Pharma facilities and both
were determined to be in compliance with good manufacturing practices.

     We believe that the raw materials needed for production of our product
candidates are readily available from alternative supplies. However, as part of
the regulatory approval process we must specify the manufacturing process and
the particular raw materials to be used. Changes in the materials or the
manufacturer could be subject to prior regulatory approval.


GOVERNMENT REGULATION

     The FDA and comparable regulatory agencies in foreign countries as well as
pharmacy regulators in state and local jurisdictions, impose substantial
requirements upon the clinical development, manufacture and marketing of
pharmaceutical products. These agencies and other federal, state and local
entities regulate research and development activities and the testing,
manufacture, quality control, safety, effectiveness, labeling, storage, record
keeping, approval, advertising, and promotion of our products.

     The process required by the FDA under the drug provisions of the United
States Food, Drug, and Cosmetic Act before our initial products may be marketed
in the U.S. generally involves the following:

     o    Preclinical laboratory and animal tests;

     o    Submission of an IND, which must become effective before human
          clinical trials may begin;

     o    Adequate and well-controlled human clinical trials to establish the
          safety and efficacy of the product candidate for its intended use;

     o    Submission to the FDA of a NDA; and

     o    FDA review and approval of a NDA.

     The testing and approval process requires substantial time, effort, and
financial resources, and we cannot be certain that any approval will be granted
on a timely basis, if at all.

     Preclinical tests include laboratory evaluation of the product candidate,
its chemistry, formulation and stability, as well as animal studies to assess
the potential safety and efficacy of the product candidate. Certain preclinical
tests must be conducted in compliance with good laboratory practice regulations.
Violations of these regulations can, in some cases, lead to invalidation of the
studies, requiring such studies to be replicated. In some cases, long-term
preclinical studies are conducted while clinical studies are ongoing.

     We then submit the results of the preclinical tests, together with
manufacturing information and analytical data, to the FDA as part of an IND,
which must become effective before we may begin human clinical trials. The IND
automatically becomes effective 30 days after receipt by the FDA, unless the
FDA, within the 30-day time period, raises concerns or questions about the
conduct of the trials as outlined in the IND and imposes a clinical hold. In
such a case, the IND sponsor and the FDA must resolve any outstanding concerns
before clinical trials can begin. Our submission of an IND may not result in FDA
authorization to commence clinical trials. All clinical trials must be conducted


                                       14
<PAGE>


under the supervision of a qualified investigator in accordance with good
clinical practice regulations. These regulations include the requirement that
all subjects provide informed consent. Further, an independent Institutional
Review Board ("IRB") at each medical center proposing to conduct the clinical
trials must review and approve any clinical study. The IRB also continues to
monitor the study and must be kept aware of the study's progress, particularly
as to adverse events and changes in the research. Progress reports detailing the
results of the clinical trials must be submitted at least annually to the FDA
and more frequently if adverse events occur.

     HUMAN CLINICAL TRIALS ARE TYPICALLY CONDUCTED IN THREE SEQUENTIAL PHASES
THAT MAY OVERLAP:

     o    Phase I: The drug is initially introduced into healthy human subjects
          or patients and tested for safety, dosage tolerance, absorption,
          metabolism, distribution, and excretion.

     o    Phase II: The drug is studied in a limited patient population to
          identify possible adverse effects and safety risks, to determine the
          efficacy of the product for specific targeted diseases and to
          determine dosage tolerance and optimal dosage.

     o    Phase III: When Phase II evaluations demonstrate that a dosage range
          of the drug is effective and has an acceptable safety profile, Phase
          III trials are undertaken to further evaluate dosage and clinical
          efficacy and to further test for safety in an expanded patient
          population, often at geographically dispersed clinical study sites.

     We cannot be certain that we will successfully complete Phase I, Phase II,
or Phase III testing of our product candidates within any specific time period,
if at all. Furthermore, the FDA or the IRB or IDDS as IND sponsor may suspend
clinical trials at any time on various grounds, including a finding that the
subjects or patients are being exposed to an unacceptable health risk.

     Under the Pediatric Research Equity Act of 2003, a sponsor is also required
to include an assessment, generally based on clinical study data, on the safety
and efficacy of its drugs for all relevant pediatric populations before it
submits a NDA. The statute provides for waivers or deferrals in certain
situations, and IDDS intends to submit applications for such waivers or
deferrals, but we can make no assurances that such situations will apply to our
products or that the waivers or deferrals will be granted.

     We also must finalize a process for manufacturing the product in accordance
with current good manufacturing practice ("GMP") requirements. The manufacturing
process must be capable of consistently producing quality batches of the
product, and we must develop methods for testing the quality, purity, and
potency of the final products. Additionally, appropriate packaging must be
selected and tested and stability studies must be conducted to demonstrate that
the product does not undergo unacceptable deterioration over its shelf-life.

     The results of product development, pre-clinical studies, and clinical
studies are submitted to the FDA as part of a NDA for approval of the marketing
and commercial shipment of the product. The FDA conducts an initial review of
each NDA submitted to assess whether it is acceptable for filing. The FDA may
refuse to file the NDA and may request additional information. In this event,
the application must be resubmitted with the additional information. The
resubmitted application is also subject to review before the FDA accepts it for
filing. Once the FDA accepts the NDA for filing, the agency begins an in-depth
review of the NDA. The FDA has substantial discretion in the approval process
and may disagree with IDDS' interpretation of the data submitted in the NDA. The
review process may be significantly extended by the FDA requests for additional
information or clarification regarding information already provided. Also, as
part of this review, the FDA may refer the application to an appropriate
advisory committee, typically a panel of clinicians, for review, evaluation and
a recommendation. The FDA is not bound by the recommendation of an advisory
committee. Manufacturing establishments often also are subject to inspections
prior to NDA approval to assure compliance with GMPs.

     Under the Prescription Drug User Fee Act ("PDUFA"), submission of a NDA
with clinical data requires payment of a fee. For fiscal year 2005, that fee is
$672,000. In return, the FDA assigns a goal of ten months for standard NDA
reviews from acceptance of the application to the time the agency issues its
response. It is not certain that FDA will meet its performance goal of ten
months for its review. The FDA's response to the NDA will be in the form of an


                                       15
<PAGE>


approval letter, or a non-approvable letter. Any response from the FDA that is
not approval of the NDA may require us to submit additional information, which
may include additional clinical data. Even if the FDA approves the NDA, the
agency may decide later to withdraw product approval if compliance with
regulatory standards is not maintained or if safety problems occur after the
product reaches the market. The FDA may require post-approval studies, also
known as Phase IV studies, to develop additional information regarding the
product. In addition, the FDA requires post-approval adverse event reporting,
and the agency has the power to require changes in labeling or to prevent
further marketing of a product. The agency may also decide later to withdraw
product approval if compliance with regulatory standards is not maintained or if
safety problems occur after the product reaches the market.

     Satisfaction of the above FDA requirements or requirements of state, local
and foreign regulatory agencies typically takes several years, and the actual
time required may vary substantially based upon the type, complexity and novelty
of the pharmaceutical product. Government regulation may delay or prevent
marketing of potential products for a considerable period of time and impose
costly procedures upon our activities. We cannot be certain that the FDA or any
other regulatory agency will grant approval for any of our products under
development on a timely basis, if at all. Success in preclinical or early-stage
clinical trials does not assure success in later-stage clinical trials. Data
obtained from pre-clinical and clinical activities are not always conclusive and
may be susceptible to varying interpretations that could delay, limit or prevent
regulatory approval. Even if a product receives regulatory approval, the
approval may be significantly limited to specific indications or uses. Further,
even after regulatory approval is obtained, later discovery of previously
unknown problems with a product may result in restrictions on the product or
even complete withdrawal of the product from the market. Delays in obtaining, or
failures to obtain regulatory approvals would have a material adverse effect on
our business.

     Any products we manufacture or distribute pursuant to the FDA clearances or
approvals are subject to pervasive and continuing regulation by the FDA,
including record-keeping requirements, reporting of adverse experiences with the
drug, submitting other periodic reports, drug sampling and distribution
requirements, notifying the FDA and gaining its approval of certain
manufacturing or labeling changes, complying with the FDA promotion and
advertising requirements. The FDA has actively enforced regulations prohibiting
the marketing of products for unapproved uses. However, in certain
circumstances, and subject to very stringent requirements, the FDA will permit
the dissemination of peer-reviewed scientific reprints related to unapproved
uses. Drug manufacturers and their subcontractors are required to register their
facilities with the FDA and state agencies and are subject to periodic
unannounced inspections by the FDA and state agencies for compliance with
current good manufacturing practices, which impose procedural and documentation
requirements upon us and our third-party manufacturers. Failure to comply with
these regulations could result, among other things, in warning letters,
suspension of regulatory approval, refusal to approval pending applications or
supplements to approved applications filed by IDDS, recalls, suspension or
closure of production or injunctions, seizures, or civil or criminal sanctions.
IDDS cannot be certain that it or its present or future subcontractors will be
able to comply with those regulations and other FDA regulatory requirements.

     We and our product candidates are also subject to a variety of state laws
and regulations in those states or localities where its products are or will be
marketed. Any applicable state or local regulations may hinder our ability to
market our products in those states or localities.

     The FDA's policies may change, and additional government regulations may be
enacted which could prevent or delay regulatory approval of IDDS' potential
products. Moreover, increased attention to the containment of health care costs
in the U.S. and in foreign markets could result in new government regulations
that could have a material adverse effect on our business. We cannot predict the
likelihood, nature or extent of adverse governmental regulation that might arise
from future legislative or administrative action, either in the U.S. or abroad.

     In addition, whether or not FDA approval has been obtained, approval of a
pharmaceutical product by comparable governmental regulatory authorities in
foreign countries must be obtained prior to the commencement of clinical trials
and subsequent sales and marketing efforts in those countries. The approval
procedure varies in complexity from country to country, and the time required
may be longer or shorter than that required for FDA approval. We may incur
significant costs to comply with these laws and regulations now or in the
future.


                                       16
<PAGE>


OTHER REGULATORY REQUIREMENTS

     The U.S. Federal Trade Commission and the Office of the Inspector General
of the U.S. Department of Health and Human Services ("HHS") also regulate
certain pharmaceutical marketing practices. Thus, reimbursement practices of the
HHS covering medicine and medical services are important to the success of our
products.

     The federal Controlled Substances Act ("CSA") imposes various registration,
record-keeping and reporting requirements, procurement and manufacturing quotas,
import and export controls, labeling and packaging requirements, security
controls, and a restriction on prescription refills on certain pharmaceutical
products. Most states impose similar controls over controlled substances under
state law as regulated by the Board of Pharmacy or other state regulatory
authorities. The CSA is administered by the DEA, a division of the Department of
Justice. To meet its responsibilities, the DEA conducts periodic inspections of
registered establishments that handle controlled substances. Failure of
companies to maintain compliance, particularly as manifested in loss or
diversion, can result in regulatory action including civil and criminal
penalties, refusal to renew necessary registrations, or initiating proceedings
to revoke those registrations. If a manufacturer or distributor has its
registration revoked, it can no longer lawfully possess or distribute controlled
substances meaning effectively that the operations of such an organization must
cease with respect to controlled substances. In certain circumstances,
violations also can lead to criminal proceedings.

     A principal factor in determining the particular requirements, if any,
applicable to a product is its actual or potential abuse profile. A
pharmaceutical product may be "scheduled" as a Schedule I, II, III, IV or V
substance, with Schedule II substances considered to present the highest risk of
substance abuse for any product with a medical use, and Schedule V substances
the lowest. Morphine and ketamine are classified as Schedule II and III
substances, respectively. As a Schedule III substance, each substance
prescription for our ketamine product would be limited to five refills.
Morphine, however, as a Schedule II substance would be subject to higher
regulation including no refills for prescriptions, special transactions
reporting to DEA, special DEA-supplied order forms for all transactions, and
written prescriptions instead of phoned or faxed to a pharmacy. The DEA also
limits the quantity of the Schedule II controlled substance inventories used by
pharmaceutical manufacturers in the production of controlled substances. As part
of its commercialization of its morphine product, IDDS, its subcontractors or
its vendors will be required to file for and obtain quotas from the DEA for the
procurement and manufacture of controlled substance active ingredients and
finished drug products.

     We are also subject to numerous federal, state and local laws relating to
such matters as safe working conditions, manufacturing practices, environmental
protection, fire hazard control, and disposal of hazardous or potentially
hazardous substances. We may incur significant costs to comply with these laws
and regulations now or in the future. We cannot assure you that any portion of
the regulatory framework under which we currently operate will not change and
that such change will not have a material adverse effect on our current and
anticipated operations.


     Over the coming year, development activity will focus on generating the
necessary non-clinical and clinical data, and documenting the manufacturing
requirements needed to support the submission package in request of the FDA
End-of-Phase II meeting. The End-of-Phase II meeting is required in order to
progress into Phase III trials and ultimately product registration. FDA
typically schedules the End-of-Phase II meeting within six weeks of the meeting
request, if accepted. If not accepted, the FDA informs the company of
insufficiencies necessary to rectify in order to reschedule. The design, timing
and cost of the Phase III development program will be largely determined by the
clinical safety and efficacy data and feedback from the FDA at the End-of-Phase
II meeting.


EUROPEAN PRODUCT APPROVAL

     Prior regulatory approval for human healthy volunteer studies (Phase I
studies) is required in member states of the E.U. Following successful
completion of Phase I studies, data is submitted in summarized format to the
applicable regulatory authority in the member state in respect of applications
for the conduct of later Phase II studies. The regulatory authorities in the
E.U. typically have between one and three months to raise any objections to the
proposed study, and they often have the right to extend this review period at
their discretion. In addition, one or more independent ethics committees, which


                                       17
<PAGE>


typically operate similarly to an Institutional Review Board in the U.S., will
review the ethics of conducting the proposed research.

     In order to gain marketing approval in the E.U., IDDS must submit a dossier
to the relevant authority for review, which is known in the E.U. as the EMAA.
The format is usually specific and laid out by each authority, although in
general it will include information on the quality of the chemistry,
manufacturing and pharmaceutical aspects of the product as well as the
non-clinical and clinical data.

     In the E.U. there is, for many products, a choice of two different
authorization routes: centralized and decentralized. Under the centralized
route, which IDDS is pursuing for its intranasal morphine product, one marketing
authorization is granted for the entire E.U., while under the decentralized
route, which IDDS is pursuing for IV diclofenac, a series of national marketing
authorizations are granted. In the centralized system the application will be
reviewed by members of the Committee for Proprietary Medicinal Products
("CPMP"), on behalf of EMEA. The EMEA will, based upon the review of the CPMP,
provide an opinion to the European Commission on the safety, quality and
efficacy of the product. The decision to grant or refuse an authorization is
made by the European Commission. In circumstances where use of the centralized
route is not mandatory, IDDS can choose to use the decentralized route, in which
case the application will be reviewed by one member state's regulatory agency.
If the regulatory agency grants the authorization, other member states'
regulatory authorities are asked to "mutually recognize" the authorization
granted by the first member state's regulatory agency.

     Approval can take several months to several years, or can be denied. The
approval process can be affected by a number of factors. Additional studies or
clinical trials may be requested during the review and may delay marketing
approval and involve unbudgeted costs. The regulatory authorities may conduct an
inspection of relevant facilities and review manufacturing procedures, operating
systems and personnel qualifications. In addition to obtaining approval for each
product, in many cases each drug manufacturing facility must be approved.
Further inspections may occur over the life of the product. An inspection of the
clinical investigation sites by a competent authority may be required as part of
the regulatory approval procedure. As a condition of marketing approval, the
regulatory agency may require post-marketing surveillance to monitor for adverse
effects, or other additional studies as deemed appropriate. After approval for
the initial indication, further clinical studies are usually necessary to gain
approval for any additional indications. The terms of any approval, including
labeling content, may be more restrictive than expected and could affect the
marketability of a product.

     Failure to comply with applicable regulatory requirements after obtaining
regulatory approval can, among other things, result in the suspension of
regulatory approval, as well as possible civil and criminal sanctions. Renewals
in Europe may require additional data, which may result in a license being
withdrawn. In the E.U., regulators have the authority to revoke, suspend or
withdraw approvals of previously approved products, to prevent companies and
individuals from participating in the drug approval process, to request recalls,
to seize violative products and to obtain injunctions to close manufacturing
plants not operating in conformity with regulatory requirements and to stop
shipments of violative products.

PRICING CONTROLS

     Before a pharmaceutical product may be marketed and sold in certain foreign
countries the proposed pricing for the product must be approved. The
requirements governing product pricing vary widely from country to country and
can be implemented disparately at the national level.

     The E.U. generally provides options for its member states to control the
prices of medicinal products for human use. A member state may approve a
specific price for the medicinal product or it may instead adopt a system of
direct or indirect controls on the profitability of the company placing the
medicinal product on the market. For example, the regulation of prices of
pharmaceuticals in the United Kingdom is generally designed to provide controls
on the overall profits that pharmaceutical companies may derive from their sales
to the U.K. National Health Service. The U.K. system is generally based on
profitability targets or limits for individual companies which are normally
assessed as a return on capital employed by the company in servicing the
National Health Service market, comparing capital employed and profits.


                                       18
<PAGE>


     In comparison, Italy generally establishes prices for pharmaceuticals based
on a price monitoring system. The reference price is the European average price
calculated on the basis of the prices in four reference markets: France, Spain,
Germany and the U.K. Italy typically establishes the price of medicines
belonging to the same therapeutic class on the lowest price for a medicine
belonging to that category. Spain generally establishes the selling price for
new pharmaceuticals based on the prime cost, plus a profit margin within a range
established each year by the Spanish Commission for Economic Affairs.
Promotional advertising costs are limited.

     There can be no assurance that any country that has price controls or
reimbursement limitations for pharmaceuticals will allow favorable reimbursement
and pricing arrangements for our products.

THIRD-PARTY REIMBURSEMENTS

     In the U.S., E.U. and elsewhere, sales of therapeutic and other
pharmaceutical products are dependent in part on the availability and adequacy
of reimbursement to the consumer or the health care provider from third party
payers, such as government and private insurance plans. Third party payers are
increasingly challenging the prices charged for medical products and services,
and new products that are more expensive than existing treatments may have
difficulty finding ready acceptance unless there is a clear therapeutic benefit.

     In the U.S., the willingness of consumers to choose treatment with a
self-administered outpatient prescription drug over a different drug, or over
another form of treatment, is often dependent in part upon the success of the
manufacturer in obtaining placement of the product on their health plan's
formulary or drug list, because favorable formulary placement means lower out of
pocket costs. Obtaining favorable formulary placement typically requires that
the product be less expensive than what the health plan determines to be
therapeutically equivalent products, and often requires manufacturers to offer
discounts or rebates. Federal law also requires manufacturers to pay rebates to
state Medicaid programs in order to have their products reimbursed by Medicaid.
In addition, the federal Medicare program, which covers most Americans over age
65 and the disabled, currently provides no coverage for self-administered
outpatient prescription drugs absent a specific statutory provision. Beginning
in the summer of 2004, Medicare sponsored a prescription drug discount card
program that is intended to reduce costs for prescription drugs, and beginning
in 2006, a new Medicare Part D will offer eligible beneficiaries limited
coverage for outpatient prescription drugs. Both of these programs will also
rely on formularies. Also beginning in 2004, Medicare is adopting new payment
formulas for prescription drugs administered in a provider setting, such as a
hospital or physician's office, that are generally expected to lower
reimbursement for those drugs.

     The E.U. generally provides options for its member states to restrict the
range of medicinal products for which their national health insurance systems
provide reimbursement. Member states in the E.U. can opt to have a "positive" or
a "negative" list. A positive list is a listing of all medicinal products
covered under the national health insurance system, whereas a negative list
designates which medicinal products are excluded from coverage. The E.U., the
U.K. and Spain use a negative list approach, while France uses a positive list
approach. In Canada, each province decides on reimbursement measures. In some
countries, in addition to positive and negative lists, products may be subject
to a clinical and cost effectiveness review by a health technology assessment
body. A negative determination by such a body in relation to one of our products
could affect the prescribing of the product. For example, in the U.K., the
National Institute for Clinical Excellence ("NICE"), provides guidance to the
National Health Service on whether a particular drug is clinically effective and
cost effective. Although presented as "guidance," doctors are expected to take
the guidance into account when choosing a drug to prescribe. In addition, health
authorities may not make funding available for drugs not given a positive
recommendation by the NICE. There is a risk that a negative determination by the
NICE will mean fewer prescriptions. Although the NICE will consider drugs with
orphan status, there is a degree of tension on the application by the NICE of
the standard cost assessment for orphan drugs, which are often priced more
highly to compensate for the limited market. It is unclear whether the NICE will
adopt a more relaxed approach toward the assessment of orphan drugs.

     We cannot give any assurance that any of our products will be considered
cost effective and that reimbursement to the consumer or the health care
provider will be available or will be sufficient to allow us to sell our
products on a competitive and profitable basis.


                                       19
<PAGE>


FRAUD AND ABUSE LAWS

     A federal law commonly known as the federal healthcare program
anti-kickback law, and several similar state laws, prohibit any remuneration
that is intended to induce physicians or others either to refer patients, or to
acquire or arrange for or recommend the acquisition of health care products or
services. While the federal law applies only to referrals, products or services
for which payment may be made by a federal health care program, the state laws
often apply regardless of whether federal funds may be involved. Other federal
and state laws prohibit anyone from presenting or causing to be presented claims
for payment to health care payers that are false, fraudulent or are for items or
services not provided as claimed. Several recent and current enforcement actions
by federal and state prosecutors have targeted some sales and marketing
activities of prescription drug manufacturers under these statutes. As we begin
to market our products to health care providers, such as physicians and
hospitals, the relationships we form, including compensation of physicians for
speaking or consulting services, financial support of continuing medical
education or research programs, and assisting customers with obtaining
third-party reimbursement for its products, could be challenged under these
broad laws. A successful challenge could lead to civil or criminal penalties,
including the exclusion of our products from reimbursement under Medicare,
Medicaid, U.S. military health care or other federally-funded health care
programs. Even an unsuccessful challenge could cause adverse publicity and be
costly to respond to, and thus could have a material adverse effect on our
business, results of operations and financial condition. It is our intention to
consult with experienced counsel concerning the potential application of these
and other laws to our business and to attempt to structure our sales, marketing
and other activities to comply with all such laws. However, given the broad
reach of these laws and the increasing attention being given to them by law
enforcement authorities, we cannot assure you that some of our activities will
not be subject to challenge in the future.

EMPLOYEES

     As of March 1, 2005, we had 10 full-time employees and one temporary
employee. We intend to employ additional employees or retain persons as
consultants as needed, depending on the availability of such persons.


                                       20
<PAGE>


                                     PART II
                                     -------


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


     This discussion and analysis should be read in conjunction with our
financial statements and accompanying notes included elsewhere in this Annual
Report. This discussion includes forward-looking statements that involve risks
and uncertainties. Operating results are not necessarily indicative of results
that may occur in future periods.

FORWARD LOOKING STATEMENTS

     We are including the following cautionary statement in this Annual Report
on Form 10-KSB to make applicable and take advantage of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 for any
forward-looking statements made by or on our behalf. Forward looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance and underlying assumptions and other statements which are
other than statements of historical facts. Certain statements contained herein
are forward-looking statements and accordingly involve risks and uncertainties
which could cause actual results or outcomes to differ materially from those
expressed in good faith forward-looking statements. Our expectations, beliefs
and projections are expressed in good faith and are believed by us to have a
reasonable basis, including without limitation, management's examination of
historical operating trends, data contained in our records and other data
available from third parties, but there can be no assurance that management's
expectations, beliefs or projections will result or be achieved or accomplished.
In addition to other factors and matter discussed elsewhere herein, the
following are important factors that in our view, could cause actual results to
differ materially from those discussed in the forward-looking statements: the
carrying-out of our research and development program for our product candidates,
including demonstrating their safety and efficacy at each stage of testing; the
timely obtaining of regulatory approvals and patents; the commercialization of
our product candidates, at reasonable costs; the ability to compete against
products intended for similar use by recognized and well capitalized
pharmaceutical companies; our ability to raise capital when needed, and without
adverse and highly dilutive consequences to stockholders; and our ability to
retain management and obtain additional employees as required. We are also
subject to numerous risks relating to our product candidates, manufacturing,
regulatory, financial resources, competition and personnel as set forth in the
section "Risk Factors" in our registration statement on Form SB-2 (File No.
333-122177), filed with the Securities and Exchange Commission on January 20,
2005. Except to the extent required by applicable laws or rules, we disclaim any
obligations to update any forward looking statements to reflect events or
circumstances after the date hereof.

OVERVIEW

     We are a specialty pharmaceutical company that applies innovative
proprietary technologies to develop new drugs and improved formulations of
existing drugs that target current unmet and underserved medical need in the
pain management market. Our product candidates are designed to offer enhanced
pain relief, fewer adverse side effects and faster relief of pain compared to
other currently available treatments. We have three late stage product
candidates in clinical development: Dyloject(TM) (diclofenac sodium injectable),
Rylomine(TM) (intranasal morphine) and PMI-100/150 (intranasal ketamine).


     We have devoted substantially all of our resources since we began our
operations in February 1998 to the development of proprietary pharmaceutical
products for the treatment of pain. We have not generated any revenues from
product sales. Since our inception, we have incurred an accumulated net loss
attributable to our common stockholders of approximately $51.0 million through
December 31, 2004, excluding approximately $3.6 million deemed dividend. These
losses have resulted principally from costs incurred in research and development
activities, including acquisition of technology rights and general and
administrative expenses. Research and development activities include costs
associated with nonclinical and clinical trials, process development and
improvement, clinical and commercial scale manufacturing. General and
administrative related costs include salary, temporary and consulting expense in
addition to non-cash stock based compensation associated with stock option
grants issued to employees and non-employees.



                                       21
<PAGE>


     On December 6, 2004, we completed a reverse merger transaction with IDDS,
whereby a newly-formed wholly-owned subsidiary of Intrac, Inc. merged with and
into IDDS, with IDDS remaining as the surviving corporation and a wholly-owned
subsidiary of Intrac. In consideration for their shares of IDDS, the former
stockholders of IDDS received approximately 95.5% of the outstanding common
stock of Intrac, Inc. After the merger, the executive officers and directors of
IDDS become the executive officers and directors of Intrac, Inc.

     For accounting purposes, the merger transaction was treated as a reverse
acquisition with IDDS as the acquiror and Intrac as the acquired party.
Therefore, when we refer to our business and financial information relating to
periods prior to the merger, we are referring to the business and financial
information of IDDS. The merger with Intrac did not have any significant effects
on our assets or liabilities or on our results of operations subsequent to the
date of the merger.

     Since our inception, we have incurred approximately $39.2 million of
research and development costs. The major research projects undertaken by us
include the development of Dyloject(TM), Rylomine(TM) and PMI-100/150. Total
research and development costs incurred to date for each of these products was
approximately $3.5 million, $7.9 million and $7.6 million, respectively. In
addition, there was approximately $1.6 million of research and development costs
incurred since inception which do not relate to our major research projects and
we incurred a charge of approximately $18.6 million related to our merger with
Pain Management, Inc. and the acquisition of a licensing agreement.

     For various reasons, many of which are outside our control, including
timing and results of our clinical trials, obtaining regulatory approval and
dependence on third parties, we cannot estimate the total remaining costs to be
incurred to commercialize our products, nor is it possible to estimate when, if
ever, any of our products will be approved by regulatory agencies for commercial
sale. In addition, we may experience adverse results in the development of our
products, which could result in significant delays in obtaining approval to sell
our products, additional costs to be incurred to obtain regulatory approval or
failure to obtain regulatory approval. In the event any of our product
candidates were to experience setbacks, it would have a material adverse effect
on our financial position and operating results. Even if we successfully
complete developments and obtain regulatory approval of one or more of our
products, failure of physicians and patients to accept our products as a safe,
cost-effective alternative compared to existing products would have a material
adverse effect on our business.


     Our financial statements have been prepared on a going-concern basis, which
assumes realization of assets and settlement of liabilities in the ordinary
course of business. We have limited capital resources, net operating losses and
negative cash flows from operations since inception and expect these conditions
to continue for the foreseeable future. In addition, it is anticipated that we
will not generate revenues from product sales during the year ending December
31, 2005. Management estimates that we have sufficient cash resources to fund
our planned operations through March 2006 and have the ability if necessary to
reduce discretionary spending to preserve cash resources. We will seek to raise
additional funds through the sale of our equity securities. We may also seek to
raise capital through collaborative arrangements with corporate sources or other
sources of financing. There can be no assurance that such additional financing,
if at all available, can be obtained on terms reasonable to us. In the event
that the sufficient funds are not available, we will need to postpone or
discontinue future planned operations and projects.


NON-CASH EXPENSE, BENEFICIAL CONVERSION FEATURE OF PREFERRED STOCK AND FINANCIAL
SUPPORT PROVIDED BY A PRINCIPAL STOCKHOLDER

     Since our inception, we have issued stock or granted stock options or
warrants to non-employee lenders and consultants and options to employees at
prices below the fair value of the underlying common stock on the date of the
grant for which we recorded non-cash expense of approximately $331,000 for the
year ended December 31, 2004, approximately $171,000 in 2003 and approximately
$1.3 million in 2002.

     In December 2001, we issued 989,991 shares of Series B Preferred Stock in
consideration of gross proceeds of approximately $5.5 million. The Series B
conversion price represented a discount from the estimated fair value of our
common stock at the time of issuance. Accordingly, the discount amount is
considered incremental yield to the preferred stockholders and has been
accounted for as a deemed dividend to preferred stockholders. Based on the


                                       22
<PAGE>


conversion terms of the Series B Stock, a deemed dividend of approximately $3.6
million has been added to the net loss applicable to common stockholders in the
year ended December 31, 2001.

     Since our inception and until September 30, 2002, Paramount Capital
Investments, LLC provided us with office space, industry expertise, financial
support and certain administrative and legal assistance at no cost to us.
Paramount Capital Investments is an affiliate of Paramount Capital, Inc., which,
in turn, is affiliated with one of our principal stockholders. Paramount Capital
is an integrated, privately held, full-service investment banking firm
specializing in private placements of equity and debt securities for publicly
traded and privately held biotechnology and biopharmaceutical companies. The
estimated fair value of Paramount's assistance has been reflected in the
accompanying financial statements as an expense in the period benefited with a
corresponding deemed capital contribution. The estimated fair value of the
financial assistance totaled none in the years ended December 31, 2004 and 2003,
and $185,000 for the year ended December 31, 2002.

RESULTS OF OPERATIONS

     REVENUES. With the exception of revenues derived from government grants and
contracts, we have generated no operating revenues since our inception and do
not expect operating revenues for the foreseeable future. In October 2000, we
the Company had received a grant of $1.2 million from the U.S. Department of
Defense ("DOD"). In May 2003, the DOD extended funding of the development of
PMI-100/150 by awarding us the Company a $4.3 million contract. The DOD contract
was the sole source of contract and grant revenue for the year ended December
31, 2004. The DOD reimburses us for certain research and development costs
related to the PMI-100/150 development program. The DOD contract is billed
monthly as costs are incurred.

     RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
consist primarily of salaries and related expenses for personnel, materials and
supplies used to develop our product candidates. Other research and development
expenses include compensation paid to consultants and outside service providers
and the costs to license acquired technologies that have no alternative future
use. We expense research and development costs as incurred. We expect that we
will continue to incur significant research and development expenses in the
future as our three product candidates enter pivotal clinical trials and
progress through the later stages of product development.

     GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
consist primarily of salaries and other related costs for personnel in
executive, finance, accounting, information technology and human resource
functions. Other costs include facility costs and professional fees for legal
and accounting services.

     INTEREST INCOME AND EXPENSE. Interest income consists of interest earned on
our cash and cash equivalent balances. Interest expense consists of interest
incurred on loans.

YEARS ENDED DECEMBER 31, 2004 AND 2003

     REVENUES. Contract revenue decreased from approximately $1.1 million for
the year ended December 31, 2003 to approximately $837,000 for the year ended
December 31, 2004. During 2004, the DOD contract was the sole source of contract
revenue. The decrease is attributable to reduced external clinical trial
expenditures billable to the DOD contract.

     RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased from approximately $2.2 million for the year ended December 31, 2003
to $4.8 million for the year ended December 31, 2004. The increase in research
and development expense resulted from the advancement of each of our three late
stage product candidate development programs.

     Dyloject(TM) clinical development and manufacturing costs increased as the
development program transitioned to the pivotal phase in Europe. In the first
quarter of 2004, we completed a bioequivance trial and in the third quarter,
initiated patient enrollment in the pivotal European registration trial. Also in
2004, we completed process development, scale-up and manufacturing of three
Dyloject(TM) production lots.


                                       23
<PAGE>


     Rylomine(TM) regulatory, biostatistical and manufacturing costs increased
associated with advancing the clinical development program in the US and greater
regulatory activity in Europe. In the third quarter of 2004, we submitted a
pre-submission meeting request package to the EMEA and in the fourth quarter of
2004, a pre-MAA meeting was held with the Agency. Also in 2004, we completed
process development, scale-up and preparation activities associated with the
future manufacturing of Rylomine(TM).

     PMI-100/150 clinical and regulatory costs increased associated with
preparation for the end-of-phase II meeting held with the FDA in the second
quarter of 2004. Expenses associated with achievement of certain clinical and
regulatory milestones under the terms of the license agreement increased by
approximately $750,000 in 2004. Nonclinical expenses associated with the
initiation of the carcinogenicity program for PMI-100/150 and contract
laboratory expenses increased by approximately $260,000.

     Clinical development expenses increased by approximately $1.2 million due
to an increase in the number of patients enrolled into clinical studies and an
increase in contract research costs in support of the Dyloject(TM) and
PMI-100/150 programs. Manufacturing expenses increased by approximately $474,000
due to increased activity associated with compliance to European regulatory
filing requirements for Rylomine(TM) and Dyloject(TM), and clinical drug supply
requirements for PMI-100/150 clinical trials. Regulatory expenses increased by
approximately $119,000 due to increased regulatory activity associated with each
of the three development programs.

     We expect our research and development expenses to continue to increase in
the next few years as we expand our development efforts and our drug candidates
pass from mid stage clinical trials to late stage clinical trials and file for
regulatory approvals. The increase may fluctuate from period to period due to
the time and nature of clinical trial expenditures and regulatory filings.

     GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased from approximately $2.0 million for the year ended December 31, 2003
to $2.7 million for the year ended December 31, 2004.

     Salary expenses declined by approximately $70,000 due to a reduction in
full time headcount that was partially offset by temporary headcount and
consulting costs which increased by approximately $428,000. Due to financing and
merger activities, we incurred higher legal, accounting, travel and printing
expenses, approximately $221,000, $198,000, $64,000, and $29,000, respectively.
Rent expenses decreased by approximately $235,000 following the relocation of
our New York head office in December 2003 to our present location.

     We expect general and administrative expenses to increase further primarily
as a result of increased recruitment and personnel costs and the opening of our
Cambridge, Massachusetts office space.

     INTEREST INCOME. Interest income decreased from approximately $14,000 for
the year ended December 31, 2003 to approximately $9,000 for the year ended
December 31, 2004 due to lower average invested balances of cash and cash
equivalents in 2004.

     INTEREST EXPENSE. Interest expense increased from approximately $18,000 for
the years ended December 31, 2003 to approximately $356,000 for the year ended
December 31, 2004 due to an increase in interest charges of approximately
$315,000 associated with a Debenture Note issued in November 2004 and retired in
December 2004 and approximately $8,000 associated with deferral of a milestone
payment associated with a license agreement.

YEARS ENDED DECEMBER 31, 2003 AND 2002

     Revenues. Grant revenue increased from $287,246 for the year ended December
31, 2002 to $1.1 million for the year ended December 31, 2003. The increase is
attributable to an increase in the proportion of activity associated with
fulfilling our obligations under the DOD contract and the addition of
reimbursable subprojects associated with the May 2003 DOD contract extension.

     Research and Development Expenses. Research and development expenses
decreased from approximately $2.4 million for the year ended December 31, 2002
to approximately $2.2 million for the year ended December 31, 2003. The decrease


                                       24
<PAGE>


in research and development expense was associated with a decline of
approximately $866,000 in license fees and milestone payments associated with
the Shimoda licensing agreement which were partially offset by higher consulting
costs associated with the in-house preparation for US and European regulatory
meetings in 2003.

     General and Administrative Expenses. General and administrative expenses
decreased from approximately $6.0 million for the year ended December 31, 2002
to approximately $2.0 million for the year ended December 31, 2003. The decrease
in general and administrative expense was due to approximately $840,000 in lower
legal, accounting and administrative costs associated with fundraising
activities and approximately $1.2 million in lower non-cash compensation charges
associated with stock options granted to employees at below fair value and to
non-employees. Salary and benefit expenses declined by approximately $600,000
due to a reduction in full time headcount from 17 in January 2003 to 10 in
December 2003 and was partially offset by higher temporary headcount and
consulting costs. These measures were taken to preserve cash prior to completion
of the sale of our Series C Preferred Stock in a private placement financing,
which was completed in August 2003. In addition, approximately $1.3 million of
offering costs were expensed in 2002 in connection with the withdrawal of our
registration statement on Form S-1 in July 2002.

     INTEREST INCOME. Interest income decreased from approximately $60,000 for
the year ended December 31, 2002 to approximately $14,000 for the year ended
December 31, 2003 due to lower average invested balances of cash and cash
equivalents in 2003.

     INTEREST EXPENSE. Interest expense increased from approximately $4,000 for
the year ended December 31, 2002 to approximately $18,000 for the year ended
December 31, 2003, resulting from the issuance of a note in November 2002 which
was retired in August 2003.

LIQUIDITY AND CAPITAL RESOURCES

     Since inception, we have financed our operations primarily through the
private placement of our equity securities, debt financings and contract revenue
primarily from the U.S. Department of Defense. We intend to continue to use the
proceeds from these sources to fund research and development activities, capital
expenditures, working capital requirements and other general purposes. As of
December 31, 2004, we had cash and cash equivalents of approximately $14.8
million.

     In December 2004, we raised approximately $18.1 million through the sale of
approximately 6.1 million shares of Common Stock at $2.95 per share in a private
placement. During 2003, we raised proceeds of approximately $4 million in a
private placement of Series C Preferred Stock, priced at $1.50 per share.
Management believes the Company has sufficient resources to fund our operations
for at least the twelve months beyond December 31, 2004. We may be required to
raise additional funds to meet long-term planned goals. There can be no
assurance that additional financing, if at all available, can be obtained on
terms acceptable to us. If we are unable to obtain such additional financing,
future operations will need to be scaled back or discontinued.

     From inception through December 31, 2004, net cash used in operating
activities was approximately $25.3 million. Net cash used in operating
activities increased to approximately $4.5 million for the year ended December
31, 2004 from approximately $2.8 million for the year ended December 31, 2003.
Higher cash outflows for general and administrative and research and development
expenses were partially offset in 2004, by an increase of approximately $1.3
million in accounts payable accrued expenses and a $0.5 million increase due to
a license of PMI 100/150. Net cash used in operating activities decreased from
approximately $6.8 million for the year ended December 31, 2002 to approximately
$2.8 million for the year ended December 31, 2003. Net cash used in operating
activities decreased in 2003 primarily due to reduced general and administrative
and research and development expenses. This decline was partially offset in 2002
by approximately $1.3 million in non-cash charge associated with stock-based
employee compensation.

     As a development stage enterprise, our primary efforts, to date, have been
devoted to conducting research and development, raising capital, forming
collaborations and recruiting staff. We have limited capital resources and
revenues, have experienced a $54.6 million net loss attributable to our common
stockholders and have had negative cash flows from operations since inception.
These losses have resulted principally from costs incurred in research and


                                       25
<PAGE>


development activities, including acquisition of technology rights and general
and administrative expenses. As of December 31, 2004, we have paid an aggregate
of $5.6 million and $1.7 million in cash since inception to West Pharmaceutical
and Shimoda Biotech (Proprietary) Ltd., respectively. We expect to incur
additional operating losses until such time as we generate sufficient revenue to
offset expenses and may never achieve profitable operations.

     We expect our cash requirements for operating activities will increase due
to the following future activities:

     o    Conduct remaining nonclinical programs, including carcinogenicity
          studies to support both Rylomine(TM) and PMI-100/150 regulatory
          submission and label extensions;

     o    Conduct clinical programs, including phase III clinical trials to
          support regulatory submissions and label extensions of our product
          candidates;

     o    Continue to support GMP drug supply requirements of our nonclinical
          and clinical trials; complete formal stability testing, analytical
          development, methods development, specification development and
          commercial scale-up;

     o    Maintain, protect and expand our intellectual property;

     o    Develop expanded internal infrastructure; and

     o    Hire additional personnel.

     From inception through December 31, 2004, net cash used in investing
activities was approximately $180,000, primarily due to the acquisition of
manufacturing equipment, furniture and fixtures and office equipment. Net cash
used in investing activities was approximately $119,000 for the year ended
December 31, 2004 compared to $35,000 in 2003 and approximately $20,000 in 2002.
Fluctuations in net cash used in/provided by investing activities since
inception are due primarily to changes in restricted cash balances and capital
expenditures. From inception to December 31, 2004, capital expenditures have not
been material resulting from our use of contract manufacturing facilities. We
expect that cash used for investing activities will increase in 2005, associated
primarily with investment in commercial scale manufacturing and filling
equipment required for the advancement of our product candidates to late stage
development and commercial production.

     From inception through December 31, 2004, net cash provided by financing
activities was approximately $40.3 million. Net cash provided by financing
activities increased to $16.2 million for the year ended December 31, 2004 from
approximately $3.8 million for the year ended December 31, 2003 and
approximately $1.3 million in 2002. Our financing activities raised net cash of
approximately $16.2 million from the private placement of our common stock in
2004 and $3.8 million from private placement of Series C Preferred Stock in
2003. In 2002, $0.5 million in proceeds from a note payable were received. In
2001, $0.8 million of offering costs related to our Form S-1 registration
statement were capitalized as prepaid offering costs which were recognized as
expense in 2002 when the registration statement was withdrawn.

CONTRACTUAL OBLIGATIONS

     The following table summarizes our contractual obligations as of December
31, 2004:


                                       26
<PAGE>


<TABLE>
<CAPTION>
                                                  PAYMENTS DUE BY PERIOD

                                                                                    Beyond
                                  Total      <1Yr.       1-3 Yr.      3-5 Yr.        5 yr.
                                  -----      -----       -------      -------        -----
<S>                           <C>           <C>        <C>          <C>          <C>
Operating Leases(1)              $268,785   $145,827     $122,958           --           --

Weg License Agreement (2)        $500,000   $500,000           --           --           --

West and Shimoda License      $11,000,000         --   $2,500,000   $4,500,000   $4,000,000
Agreements(3)

Total                         $11,768,785   $645,827   $2,622,958   $4,500,000   $4,000,000
</TABLE>

     The known due dates of our contractual obligations do not extend beyond
three years, however see footnotes below.

     (1) We lease approximately 5,500 square feet of general office space in
addition to small equipment leases.

     (2) Under the license agreement with Dr. Weg, we are obligated to make
aggregate milestone payments of approximately $1.6 million to Dr. Weg, Herbert
Brotspies and Calgar & Associates. As of December 31, 2004, we had paid Dr. Weg,
Herbert Brotspies and Calgar & Associates in aggregate $950,000 in cash and
issued 66,563 shares of Common Stock in lieu of $100,000 cash. Under the terms
of the license agreement, the Company can elect to pay the remaining $500,000
milestone in cash or equity. On December 31, 2004, we accrued the final $500,000
milestone payment which, as noted above we expect to pay during the year ending
December 31, 2005.

     (3) Under the license agreements with West Pharmaceutical, we may be
required to pay an aggregate of $5.0 million for research and development
milestones if certain defined events occur, which include the first filing of a
marketing authorization application with a regulatory agency, first approval of
a marketing authorization application and the first commercial sale of a
licensed product. Under the license agreement with Shimoda Biotech (Proprietary)
Ltd., we may be obligated to pay an aggregate of $6.0 million upon the
occurrence of specified developmental milestones, which include the filing of an
NDA with the FDA for Dyloject(TM), the approval of an NDA by the FDA and the
first commercial sale of a licensed product and pay a royalty based upon our and
our sublicensees' sales of products. The timing of the remaining milestones is
dependent upon factors that are beyond our control, including our ability to
recruit patients, the outcome of future clinical trials and any requirements
imposed on our clinical trials by regulatory agencies. However, for the purpose
of the above table, we have assumed that the payment of the milestones will
occur between two and more than five years, from December 31, 2004, which is
subject to change, as noted.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

     REVENUE RECOGNITION. We have been awarded government grants and contracts
from the U.S. Department of Defense ("DOD") and the National Institutes of
Health (the "NIH"), which are used to subsidize the Company's research and
development projects. The DOD reimburses us for certain research and development
subproject costs related to the PMI-100/150 development program. DOD and NIH
revenue is recognized as subsidized project costs for each period are incurred.
Contact and grant revenue is derived from internal headcount expense and
external contractual expense, both of which, are highly dependent on the timing,
order and relationship of individual reimbursable subprojects. Our grant
submissions may fluctuate from period to period due to the timing and scope of
these activities and the results of studies and clinical trials.

     RESEARCH AND DEVELOPMENT COSTS. Since our inception, we have incurred
approximately $39.2 million of research and development costs. The major
research projects undertaken by us include the development of Dyloject(TM),
Rylomine(TM) and PMI-100/150. We expense all research and development costs as
incurred for which there is no alternative future use. For various reasons, many
of which are outside our control, including timing and results of our clinical
trials, obtaining regulatory approval and dependence on third parties, we cannot
estimate the total remaining costs to be incurred to commercialize our products,
nor is it possible to estimate when, if ever, any of our products will be
approved by regulatory agencies for commercial sale. In addition, we may
experience adverse results in the development of our products, which could
result in significant delays in obtaining approval to sell our products,
additional costs to be incurred to obtain regulatory approval or failure to
obtain regulatory approval. In the event any of our product candidates were to


                                       27
<PAGE>


experience setbacks, it would have a material adverse effect on our financial
position and operating results. Even if we successfully complete developments
and obtain regulatory approval of one or more of our products, failure of
physicians and patients to accept our products as a safe, cost-effective
alternative compared to existing products would have a material adverse effect
on our business.

     STOCK BASED COMPENSATION. We use the intrinsic-value method of accounting
for stock-based awards granted to employees in accordance with Accounting
Principles Board Opinion No. 25 ("APB No. 25") and its related interpretations.
Accordingly, we recognize compensation expense in our financial statements in
connection with stock options granted to employees if the terms of the option
grant are not fixed or the exercise price is less than the fair value of the
Company's Common Stock at the time the stock option is granted.

     The fair value of the options and warrants granted to non-employees for
financing, goods or services are included in our financial statements and
expensed over the life of the debt, as the good are utilized or services
performed, respectively. Securities issued in connection with services or
financings were valued based on the estimate of fair value of the securities
issued as determined by management. While we were a privately held company, the
fair value of our common stock for purposes of determining compensation expense,
if any, under APB No. 25 was based on amounts paid by outside investors for our
preferred stock in recent financings, the progress of our research and
development programs and other related factors. The fair value of options
granted to non-employees is estimated using a Black-Scholes option valuation
model. This model has a number of variables, including expected volatility of
our common stock, expected term, dividend yield and risk free interest rate.
Volatility, while the Company was privately held, was based upon the average
volatility of publicly traded peer companies in the biopharmaceutical industry.
The expected term is the median expiration period of the underlying options. The
risk free interest rate was calculated from the weighted average yield of the
zero coupon bond corresponding to the same issue and expiration date of the
option. A change in any of the assumptions noted herein could have a material
impact on our reported operating results.

INCOME TAXES

     As of December 31, 2004, we had approximately $22.4 million of net
operating loss carryforwards available to offset future taxable income. These
carryforwards will expire between 2018 and 2024. We have incurred operating
losses since inception and have established valuation allowances equal to the
total deferred tax assets due to the uncertainty with respect to achieving
profitable operations in the future. Should the uncertainty regarding our
ability to achieve profitable operations change in the future, we would reverse
all or a portion of the valuation allowance, the effect of which could be
material to our financial statements.

RECENT ACCOUNTING PRONOUNCEMENTS

     In April 2004, the Emerging Issues Task Force issued Statement No. 03-6,
Participating Securities and the Two-Class Method under FASB Statement No. 128,
Earnings per Share ("EITF 03-6"). EITF 03-6 addresses a number of questions
regarding the computation of earnings per share (EPS) by companies that have
issued securities other than common stock that contractually entitle the holder
to participate in dividends and earnings of the company when, and if, it
declares dividends on its common stock. EITF 03-6 defines participation rights
based solely on whether the holder would be entitled to receive any dividends if
the entity declared them during the period and requires the use of the two-class
method for computing basic EPS when participating convertible securities exist.
In addition, EITF 03-6 expands the use of the two-class method to encompass
other forms of participating securities and is effective for fiscal periods
beginning after March 31, 2004. Although the Company has participating
securities, since the Company has had net losses since inception, EITF 03-6 is
not applicable to any period presented and the Company's adoption of EITF 03-6
did not have an impact on the Company's financial statements.

     In December 2004, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 123R ("SFAS No. 123R"),
Share-Based Payment. SFAS No. 123R revises SFAS Statement No. 123, Accounting
for Stock-Based Compensation and supersedes APB No. 25, Accounting for Stock
issued to Employees, and its related implementation guidance. The provisions of
SFAS No. 123R require a public entity to expense, in the income statement, the
fair value of awards of equity instruments exchanged for employee services,
based on the grant-date fair value of those awards. The grant-date fair value of
equity instruments will be estimated using an appropriate option pricing model


                                       28
<PAGE>


and will be recognized over the vesting period of the awards. SFAS No. 123R will
be effective, for public companies, for interim or annual reporting periods that
begin after June 15, 2005 . SFAS No. 123R allows companies to choose from
several transition methods for recognizing the cost of share-based awards
granted to employees prior to adoption of the Standard. The Company is in the
process of analyzing the appropriate transition method to adopt and expects the
adoption of SFAS No. 123R to have a material impact on its financial statements
by increasing operating expenses, net loss attributable to common stockholders
and net loss per share attributable to common stockholders.


                                       29
<PAGE>


                                   SIGNATURES
                                   ----------

     Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized on the 22nd day of
July 2005.

                                         INTRAC, INC.

                                         By: /s/ Fred H. Mermelstein
                                             -----------------------------
                                             Fred H. Mermelstein
                                             President

                                POWER OF ATTORNEY
                                -----------------

     Each director and/or officer of the registrant whose signature appears
below hereby appoints Fred H. Mermelstein, Ph.D. or Douglas A. Hamilton as his
attorney-in-fact to sign in his name and behalf, in any and all capacities
stated below, and to file with the Securities and Exchange Commission, any and
all amendments, to this Annual Report of Form 10-KSB.

     Pursuant to the requirements of the Securities Exchange Act of 1934 this
report has been signed by the following persons in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
SIGNATURE                                         TITLE                        DATE
---------                                         -----                        ----

<S>                                 <C>                                    <C>
/s/ Douglas G. Watson*              Chairman of the Board and Director     July 22, 2005
-------------------------------
Douglas G. Watson


/s/ Fred H. Mermelstein             Director                               July 22, 2005
-------------------------------
Fred H. Mermelstein


/s/ Douglas A. Hamilton             Chief Operating Officer and Chief      July 22, 2005
-------------------------------     Financial Officer (Principal
Douglas A. Hamilton                 Financial and Accounting Officer)


/s/ Daniel B. Carr                  Director                               July 22, 2005
-------------------------------
Daniel B. Carr


/s/ Jackie M. Clegg*                Director                               July 22, 2005
-------------------------------
Jackie M. Clegg


/s/ Peter M. Kash*                  Director                               July 22, 2005
-------------------------------
Peter M. Kash


                                    Director                               ____ __, 2005
-------------------------------
William P. Peters


*By: /s/ Fred H. Mermelstein        Attorney-in-Fact                       July 22, 2005
     --------------------------
         Fred H. Mermelstein
</TABLE>


                                       30